England & Wales

Introduction

We live in interesting times. In 2017 we have seen events whose repercussions may be felt by the United Kingdom, and the world, for years to come.

Meanwhile, it has largely been business as usual for international commercial arbitration in London. Despite all that has changed in the past year, the essential structure behind London’s success as an arbitral seat remains unchanged. However, faced by increasing competition from other arbitral seats, London is increasingly self-conscious about the need to maintain its lead. The position of the English Commercial Court to arbitration remains ‘Maximum support. Minimum Interference.’1

We will update you on some key developments since the publication of last year’s European Arbitration Review in October 2016, before discussing what the future may hold for arbitration in the UK in light of Brexit and talk of reform.

2017 developments

Third-party funding of arbitration

In simple terms, ‘third-party funding’ is an agreement by an unconnected entity to fund a party’s claim, in return for a share of any compensation. At its best, third-party funding allows impecunious companies to go forward with good claims and gives well-off companies a choice whether to tie up their own funds in a claim or to reduce their risk exposure.

Third-party funding in the UK is a relatively developed market compared to most jurisdictions. In the UK, funding someone else’s claim has long been legal. By contrast, Singapore and Hong Kong voted only this year to decriminalise and regulate third-party funding of arbitration. In the UK, there is no statutory regulation of third-party funding. Instead, funders may choose to become a member of the Association of Litigation Funders and abide by the ‘Code of Conduct for Litigation Funders’. The Code was revised in November last year. This self-regulation is only market-incentivised, not compulsory: membership increases the chances of being recommended by lawyers and chosen by parties.

Lord Jackson, in his influential 2009 Review of Civil Litigation Costs, supported ‘in the first instance, a voluntary code for third-party funding.’ Simultaneously, he cautioned that ‘if the use of third-party funding expands, there may well be a need for full statutory regulation.’2 The issue has been kept under review. For now, however, the UK’s light touch to regulation continues. In January this year, the government stated that it ‘does not believe that the case has been made out for moving away from voluntary regulation’, because ‘[t]he market for third-party litigation funding remains at a relatively early stage in its development in this jurisdiction and we are not aware of specific concerns about the activities of litigation funders.’3

Interestingly, less than a third of respondents to Queen Mary University of London’s 2015 International Arbitration Survey thought that that the English model of collective self-­regulation is the most effective. A total of 71 per cent wanted the sector to be regulated. However, less than half the respondents with first-hand experience of third-party funding believed that the sector needed regulation.4

September 2016 saw a potentially landmark decision, Essar v Norscot, in which the High Court upheld an arbitration costs award which included third-party funding costs.5 If the costs of third-party funding can be recovered from the other side, seeking outside funding would become much more attractive. However, the facts of the case were extreme. The arbitrator observed that ‘Essar had set out to cripple Norscot financially’ and that the arbitral process was ‘a David and Goliath battle’, forcing Norscot’s managing director to remortgage his home and Norscot to incur the third-party funding fees.6 Doubtless, the decision has already encouraged parties in arbitration to seek to recover their third-party funding costs (and perhaps other funding such as parent company or bank loans). Only time will tell whether these subsequent applicants will be successful on less exceptional facts. No new challenge to such an award has yet been decided by the High Court. Until then, it remains to be seen whether this decision turned only on its facts or represents a precedent that will influence the arbitration funding market in the longer term.

Another decision involving bad behaviour and third-party funding was Excalibur Ventures v Texas Keystone.7 Excalibur’s claim for a share in Kurdistan oilfields, or US$1.65 billion, had failed ‘on every point’ in a ‘resounding, indeed catastrophic, defeat’.8 Excalibur’s witnesses had been found to have made ‘false and misleading statements’ and Excalibur’s lawyers pursued a ‘war of attrition’ with ‘aggressive and unacceptable correspondence’.9 Excalibur, however, was ‘nothing more than a brass plate’ without assets. The claim was pursued with the benefit of a conditional fee arrangement from Clifford Chance and third-party funding.10 The Court of Appeal held that the funders were required to pay the defendant’s costs on an indemnity basis even though the funders ‘did nothing discreditable in the sense of being morally reprehensible or even improper’.11 In doing so, the court set out useful guidance on the extent to which third-party funders may be ordered to pay the costs of a defendant who has successfully defended their funded claim: ‘The derivative nature of a commercial funder’s involvement should ordinarily lead to his being required to contribute to the costs on the basis upon which they have been assessed against those whom he chose to fund.’12

None of Excalibur’s backers were members of the Association of Litigation Funders. Only one of its funders had any experience of funding claims and never in the UK. This was not a typical example of third-party funding in the UK.13 But for that same reason, the case illustrates the judicial acceptance in the UK of third-party funding when conducted responsibly. Done properly, third-party funding is ‘an accepted and judicially sanctioned activity perceived to be in the public interest’.14

Agreements to arbitrate

The UK’s Arbitration Act requires little formality for an effective agreement to arbitrate. Arbitration agreements need only be in writing or evidenced by writing.15 Further, a primary virtue of English law is its largely pragmatic approach to interpreting the parties’ agreement. Although a pure agreement to agree in the future is not a contract, the English courts are reluctant to conclude that an agreement is too uncertain to be enforced: ‘[t]he role of the court in a commercial dispute is to give legal effect to what the parties have agreed, not to throw its hands in the air and refuse to do so because the parties have not made its task easy.’16 This attitude is illustrated in relation to an arbitration agreement by the 2017 case Associated British Ports v Tata Steel.17

In 1995, the parties entered into a 25-year licence for Tata’s use of the deep water harbour at Port Talbot. They agreed that, ‘in the event of any major physical or financial change in circumstances affecting the operation’ after the half way point, either party could require the terms of their licence to be renegotiated to reflect the change in circumstances. And that ‘if agreement is not reached within a period of six months [.. .] the matter shall be referred to an Arbitrator’.18 Tata argued that ‘market challenges’ (Chinese competition, US tariffs, the formerly strong pound) constituted a ‘major financial change’ triggering reassessment of the licence fee.19 Associated British Ports argued, first, that the term ‘major financial change’ was too uncertain to trigger a binding obligation to arbitrate and, secondly, that there were insufficient objective criteria for an arbitrator to amend the licence.

The judge held that the arbitration agreement was effective. The meaning of ‘major financial change’ was sufficiently certain because there are ‘some changes which would definitely fall within the scope of the phrase [.. .] and some changes which clearly fall outside it [.. .] even though it may be difficult in the abstract to draw the precise divide’.20 Further, the arbitrator would be able to determine what amendments are reasonable by considering the existing licence, the circumstances existing when it was first agreed, the subsequent change in circumstances and the parties’ own suggestions. The arbitrator would not have to ‘make it up as he goes along’.21

This case exemplifies how the English court will give effect to an arbitration agreement, but also why great care should be taken when drafting arbitration clauses in order to avoid the question going to court in the first place. This particular clause also demonstrates the flexibility of arbitration as a dispute resolution mechanism in comparison with litigation. Rewriting the contract is not a remedy available to the English court. But, in arbitration, parties have the choice to agree that, if they fail to agree, an independent third party will impose a reasonable solution upon them.

Emergency arbitrators

Historically, if a party to an arbitration agreement needed urgent relief before the appointment of the arbitral tribunal, there was little choice except to seek the assistance of the national court: using the arbitral process would simply take too long. The typical arbitral appointment process takes significant time and, by this time, the damage might have been done. Now, an increasing number of arbitral rules provide for the accelerated appointment of an emergency arbitrator. An emergency arbitrator can generally be appointed within a few business days and then provide relief pending the constitution of the full tribunal. Once constituted, the full tribunal will take over and decide whether to uphold, amend or vacate any decision of the emergency arbitrator.

In 2016, the London Court of International Arbitration (LCIA) received only one application for the appointment of an emergency arbitrator, which it rejected.22 By comparison, the International Chamber of Commerce (ICC) granted six out of 25 applications for an emergency arbitrator;23 the Singapore International Arbitration Centre (SIAC) received six applications in 2016, and has never refused an application.24

In Gerald Metals v Timis, the question arose of the interplay between the emergency powers of the court and of arbitral institutions.25 Under the Arbitration Act, in urgent cases, the court may order preservation of evidence or assets. However, in any case, the court shall act only if the arbitral tribunal or institution ‘has no power or is unable for the time being to act effectively.’27 In this case, the LCIA had already decided to refuse the applicant’s request for an emergency arbitrator. So, the judge concluded that the court had no power to act.

There remain situations where the court retains the power to act because the need for relief is so urgent that an emergency arbitrator would be inadequate: for instance, if applying for a freezing injunction without notice to the other side. But, in simple terms, the emergency arbitrator provisions in the arbitral rules are now shown to reduce access to urgent relief from the English court. This may seem counter-intuitive: the introduction of emergency arbitrators was generally considered to increase the options for emergency relief. Indeed, the LCIA Rules themselves state that their emergency arbitrator provision ‘shall not prejudice any party’s right to apply to a state court [.. .] and shall not be treated as an alternative to or substitute for the exercise of such right’.28

In this way, emergency arbitrator rules may have the opposite of their intended effect. According to the 2015 International Arbitration Survey, 46 per cent of parties would look to the court compared to 29 per cent who would look to an emergency arbitrator.29 So, some parties may now consider amending or entirely deleting emergency arbitrator provisions. Otherwise, court is a resort only if it is the only resort.

Penalties for breach of freezing injunctions

The freezing injunction is one of the most powerful weapons in English law. In summary, a freezing injunction is an interim order prohibiting a party from dealing with or disposing of assets. Freezing orders typically also require respondents to give disclosure about their assets. Due to the potentially oppressive nature of such an order, an applicant must first meet a number of thresholds, including demonstrating the risk that the assets will be dissipated unless the court intervenes. Then, any respondent who fails to comply with an injunction will be in contempt of court, which has criminal sanctions.

A v B considered the penalty for failing to comply with a freezing order given in support of a ‘relatively modest’ arbitral award.30 A Chinese individual, Mr Hua, who speaks very limited English, had failed to make the required disclosures about his company. He had been found in contempt of court and initially sentenced to 18 months in prison. Following this sentence, he had made the required disclosures (which revealed that there were no assets), apologised to the court, and the arbitral award had been settled in full. It was significant that Mr Hua had not made a tactical decision to defy the injunction in order to gain an advantage and that he was not as aware of the committal hearing as the court would have wished him to be.31 The judge considered that Mr Hua had suffered enough and lifted the prison sentence.

The case shows the court taking a ‘just and fair’ approach to the policing of its orders. The judge, however, emphasised that there is ‘a public interest in the orders of this court being obeyed’ and that ‘sanctions for non-compliance will ordinarily be serious’.32 This last point was illustrated one month later by Palmer v Tsai (although not arising out of an arbitration).33 There Mr Tsai, a company director, failed to deliver up one of his passports and violated the disclosure requirements in a worldwide freezing order. Unlike Mr Hua, Mr Tsai was ‘perfectly fluent in English’34 and a ‘thoroughly dishonest witness’.35 Nor did a letter from a doctor avail him.36 He was sentenced to 18 months in prison.

Challenges to arbitrators

The first section of the Arbitration Act sets out the foundational principle that ‘the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal’.37 Hence, every party has the important right to apply to the court to remove an arbitrator if there are justifiable doubts about his or her impartiality.38

First, an applicant must exhaust any available recourse to the arbitrator and arbitral institution.39 It cannot be known how many successful and unsuccessful challenges were made to the arbitrators themselves. In 2016, six challenges went to the LCIA and the LCIA partially accepted one.40 The ICC received 50 challenges and accepted five.41

Several challenges proceeded to the High Court. In H v L, the court recognised, in the context of an insurance dispute, that an arbitrator may be appointed legitimately in several arbitrations arising out of the same event.42 In T v V, an arbitrator’s peremptory order was held to be within the range of reasonable responses and provided no factual basis for seeing apparent bias.43 In P v Q, the court declined to order disclosure from arbitrators in support of an application to remove them, mindful that the risk of disclosure would have a ‘chilling effect’ which would counter-productively ‘incentivise arbitrators not to record anything in documents’, potentially damaging ‘international arbitration as a whole’.44 The same judge later refused to remove the arbitrators because their use of a tribunal secretary was not improper.45 The legal test applied in such judgments is whether a fair-minded and informed observer would consider there was a real possibility of bias in light of the specific facts. The leitmotif is a robust realism.

Brexit – good news for arbitration in the UK?

Much ink has already been spilt in writing on the potential impacts of Brexit on English law and English dispute resolution. Until the actual political form of Brexit is known, much of this must necessarily be hypothetical, even speculative. Nevertheless, a review of 2017 would not be complete without consideration of Brexit.

As the Chief Justice, Lord Thomas, has put it, ‘Brexit [is] probably amongst the biggest peacetime issues that the UK has ever faced and without doubt the most complex in legal terms.’46 Although the effects of Brexit are contentious, and may as yet be unknowable, few deny that its impact will be widely felt.

So, it may be surprising to learn that Brexit may have minimal impact on arbitration in the UK. Elsewhere, Lord Thomas summarised some of the major advantages of English arbitration, explaining why these will remain untouched by Brexit:47

Brexit can have no impact on this cornerstone of our legal system – integrity, independence and expertise of the senior judiciary.

In arbitrations, the supervisory court of the arbitration will be a business-friendly court run by a judge with extensive and relevant commercial experience.

Brexit will have no impact on the New York Convention on Arbitration Awards.

Simply put, the pillars of London’s strength as an arbitral seat are not founded on the UK’s membership of the EU. Those pillars will remain after Brexit.

English arbitration awards will remain enforceable in the EU

The final factor above – enforceability of arbitral awards – merits further discussion. The ability to enforce an arbitral award around the world is generally seen as international arbitration’s most valuable characteristic.48 The New York Convention provides the widest international regime for the enforcement of arbitral awards. In total, 157 states are party to the Convention (including the UK and all other EU member states). In principle at least, an arbitral award rendered in one signatory state can be enforced in any other signatory state, subject only to limited defences. No equivalent international regime exists for court judgments. Depending on the jurisdictions involved, enforcing a court judgment in a different state may be more expensive, time consuming and uncertain, even impossible. And, as the House of Lords recognised, ‘an unenforceable judgment is at best valueless, at worst a source of additional loss.’49

So, it is important to keep in mind that the ability to enforce an English arbitration award internationally does not depend upon the UK’s membership of the EU. You will be able to take your English arbitral award into the EU in the same way.

Meanwhile, the future remains uncertain for enforcement of court judgments

By contrast, there is significant uncertainty and debate about the future regime for enforcement of court judgments between the UK and EU. Currently, mutual enforcement of judgments within the EU depends on EU law. When the UK leaves the EU, it will fall outside the EU regime, unless some arrangement is agreed as part of the exit negotiations. In many ways this is a political question to be answered by the executive; but the Lord Chief Justice has gone so far as to opine that a simple and flexible regime for mutual recognition of court judgments must be in the respective interests of both the EU and the UK.50 In July, Lord Thomas called upon the government to clarify the position ‘in the immediate future.’51 In August, the government’s ‘future partnership paper’ on ‘providing a cross-border civil judicial cooperation framework’ went some way to providing that clarification.52 Yet, the detail is still to come and it remains to be seen whether the two sides will be able to agree.

As the government acknowledges, ‘Businesses and investors value certainty.’53 In the current climate of uncertainty, contracts must still be negotiated and decisions must still be made about whether to agree to arbitration or litigation. And, until there is certainty about national court judgments, arbitration may well represent the safest choice. Hence, there is more than self-interest in the London Court of International Arbitration’s message ‘Keep calm and carry on arbitrating in London’.54

Post-Brexit, will the English court once again be free to injunct EU court proceedings?

Historically, the English courts were able and willing to injunct European court proceedings commenced in breach of an arbitration agreement (or more accurately, to injunct parties from commencing or continuing with such proceedings). Arbitration is generally excepted from the EU regime governing jurisdiction. However, in 2009, the European Court of Justice (ECJ)55 interpreted this arbitration exception narrowly,56 disagreeing with the opinion of the House of Lords (now the UK’s Supreme Court).57 The ECJ held that it was against EU Regulation for one member’s court to issue an anti-suit injunction in respect of litigation brought in breach of an arbitration agreement in another member’s court. As a result, English anti-suit injunctions ceased to exist as a weapon against court proceedings in the EU, even when those EU proceedings violated an arbitration agreement.

In 2012, the EU Regulation was revised, and there has been debate whether these changes re-enabled member state courts to injunct parties to proceedings before other member state courts in breach of an agreement to arbitrate. Advocate General Wathelet has opined to the ECJ that national courts are once again free to do so, but the ECJ notably declined to address the issue.58 Since the revisions, it appears that no party has sought such an injunction. So although there is some doubt, there is reason to think that, so long as the UK is a member of the EU, UK courts have no power to injunct EU court proceedings, even in support of arbitration.59

Conversely, when the UK leaves the EU, this weapon may be returned to the UK’s armoury. If so, London will gain one advantage over other European seats. If, for example, the other party to an arbitration agreement started a claim in the Italian courts, it would be possible to gain an injunction from the English court to stop this. However, this power would depend on the Brexit deal struck. There is a strong movement within the English legal profession that the UK should enter into an agreement to ensure that something very like the existing jurisdiction and enforcement regime continues to apply, the general advantages outweighing this particular cost.60 From its recent ‘future partnership paper’, the government appears to agree.61

English contractual law will remain just as commercially useful

The law governing a contract and the seat of the arbitration do not have to be the same. Many English seated arbitrations concern agreements governed by foreign laws; and many foreign seated arbitrations concern agreements governed by English law. For instance, English law governed 19 per cent of new Singapore International Arbitration Centre cases last year.62 Similarly, English law was the preference of half of respondents to a 2016 study by the Singapore Academy of Law (almost twice the preference for Singaporean law, despite the common origin of the two legal systems).63

Yet, although the contractual law and the seat of arbitration are conceptually distinct, the two often align in practice. The law governing the substance of the dispute is the second most frequently given reason for choosing the seat of arbitration (albeit substantially less important than the reputation of the seat).64 Hence, the popularity of England as an arbitral seat is interconnected with the popularity of English contractual law. According to the Commercial Bar Association, ‘London is the natural seat for the resolution of disputes arising out of contracts governed by English law.’65

Brexit should not change this. English contractual law is already, and always has been, fundamentally independent of EU law. In Lord Thomas’ words, ‘Brexit will not change the substantive content and application of English contract and commercial law – as it was never part of EU law.’66 Broadly, English contractual law reflects common-sense and respects the terms of a deal. English law for contracts remains ‘[o]ne of our greatest historical exports’67 and a ‘national treasure’.68

One final note of caution

The Lord Chief Justice has concluded that ‘Arbitration in the UK will not be affected by Brexit in any way.’69 Indeed, Emmanuel Macron may agree, at least to a degree. In a June 2016 interview with Le Monde, when minister for the economy, President Macron warned that Brexit would turn the UK into ‘a little country’, but it would be an ‘arbitration place at Europe’s border’.70

Taken too literally, the Lord Chief Justice’s conclusion is perhaps a little too stark (as he himself has implicitly recognised elsewhere).71 As we have explained, international arbitration in the UK may well be affected, but positively. Conversely, in certain circumstances, it may be advantageous for parties to remain within the EU for the purposes of arbitration.

But neither the optimists nor the pessimists should overstate their case. The success of international arbitration in the UK is not purely a matter of law. Arbitration does not operate in a vacuum. For instance, the popularity of international arbitration in London is partly tied to the strength of the wider economy and the UK’s openness to international commerce (and free flow of legal talent). If the UK economy suffers, it may be unrealistic to believe that arbitration will not also suffer. Arbitration cannot be entirely immune to a bad Brexit.

Ultimately, arbitration is about choice. And perception matters. The future of international arbitration in England will depend on the choices – right or wrong – made by businesses in the dispute resolution agreements in their contracts.

A healthy caseload in London

There is no real suggestion that London has yet been knocked from its top spot as the most widely used and preferred seat for commercial arbitration.72 London’s popularity for arbitration appeared to suffer no measurable damage in the immediate aftermath of the Brexit referendum of June 2016.

The latest figures available for the London Court of International Arbitration indicate a stable caseload, despite growth in Eastern jurisdictions, chiefly Singapore and Hong Kong.73 Of course, the LCIA is far from the only arbitral institution overseeing arbitrations seated in London.74 Nevertheless, LCIA figures serve as a crude barometer for the London market. Only 16 per cent of parties were English, reflecting the strong international character of dispute resolution in London. Conversely, over 86 per cent of contractual disputes were governed by English law, reflecting its popularity as a governing law of choice for businesses, whatever their nationality.

Reform, not revolution, to come?

January 2017 marked the twentieth anniversary of the coming into force of the Arbitration Act 1996. The anniversary provoked a degree of introspection in the arbitral community. England’s Arbitration Act has certainly played an important part in London’s success as an international dispute resolution hub. Studies suggest that a country’s arbitration law is the second most important factor in parties’ preference for that seat (second only to the impartiality of the country’s legal system).75 Likewise, the handful of cases involving arbitration that reached the Court of Appeal or Supreme Court so far in 2017 testify to the broadly settled application and interpretation of the Arbitration Act.

In general terms, the consensus amongst practitioners appears to be that the Act has served as a solid workable foundation for London-seated arbitrations, perhaps with some room for improvement. But there is more debate about what that improvement might be. Many consider that ‘if it ain’t broke, don’t fix it.’

In late 2016, the Law Commission sought views on whether changes to the Arbitration Act could help preserve the UK’s position in competition with other jurisdictions. The rising stars of Singapore and Hong Kong were not named, but must have been in mind. The Commission was particularly interested in ‘whether changes to the Act would make arbitrations less costly or lengthy’.76 For example, ‘[m]aking explicit provision for summary judgment might encourage arbitrators to take a bolder approach in the interests of efficient case management.’77 Cost and time are often cited by users as among the worst characteristics of international arbitration.78 Expedited summary procedures may be of special interest to banks and other financial institutions.

The Law Commission had planned to seek the Lord Chancellor’s approval for its latest programme of law reform in June/July 2017. However, this plan was derailed by the UK’s general election. At the time of going to press, it is understood that the Commission will seek the Lord Chancellor’s approval in October 2017. So, the near future should tell whether English arbitration is due for reform.

Will there be increased access to appeal?

In March last year, the Lord Chief Justice created something of a storm in the arbitral community by suggesting that the growth of arbitration has impeded the development of English contractual law in the courts.79 In essence, if new questions of commercial law are being decided by arbitrators in private, they are not being settled by judges in public and creating precedent. There is a risk that the market will outpace the law. Lord Thomas’ empirical diagnosis was controversial: others would argue that the English courts are deciding sufficient questions raised by cutting-edge commerce to keep the law up to date with the modern world.80 Lord Thomas’ proposed possible cures were even more controversial, specifically the idea of relaxing the threshold for appealing from arbitration on a point of law in order ‘to maintain a healthy diet of appellate decisions, capable of developing the law particularly on issues of general public importance.’81 Here, Lord Thomas clashed with at least one former Supreme Court Justice who ‘ha[d] no doubt that any move to expand the right of appeal from arbitration awards would be a wholly retrograde step.’82 Lord Thomas is also opposed by what is perhaps the orthodox view within the world of international arbitration.83

The rights or wrongs of this debate provoked by Lord Thomas’ speech are beyond the scope of this review. His proposal to rebalance the relationship between court and arbitration was considerably more nuanced than some commentators made out (or can be conveyed in our brief summary above). In any event, it should be remembered that these were his personal thoughts, not official judicial or government policy. Further, there is some suggestion that Lord Thomas has since softened his initial position, at least publically. In April this year, Lord Thomas further emphasised the complementary roles of arbitration and court: ‘The key point is the balance between respect for party choice and the wider state and public interest in ensuring the law is developed and keeps pace with change.’84 Perhaps even his opponents will agree that this is ‘a subject that needs a great deal of further discussion’.85

Despite this debate, the general sense, for now, is that any reform is most likely to be a matter of minor adjustment, not wholesale change. The Law Commission ‘think[s] that even relatively small changes could make a difference.’ The Law Commission is mindful of praise for the Arbitration Act in ‘helping to make the UK a top destination for commercial arbitrations.’86 No one in the UK wants to jeopardise that.

‘Speech by the Lord Chief Justice: Opening of the Business and Property Courts for Wales’, para. 10(iii).

‘Speech by the Lord Chief Justice: Opening of the Business and Property Courts for Wales’, para. 14.

‘Providing a cross-border civil judicial cooperation framework – a future partnership paper’, UK Government, 22 August 2017, para. 19: ‘The UK will [.. .] seek an agreement with the EU that allows for close and comprehensive cross-border civil judicial cooperation on a reciprocal basis, which reflects closely the substantive principles of cooperation under the current EU framework.’

For instance, the Brexit Arbitration Sub-Group of England’s Commercial Bar Association is of the opinion that neither the English court nor the CJEU would today decide the issue any differently in light of the changes to the Regulation (‘Brexit Report’, COMBAR, January 2017, para. 19 & fn 14).

‘Study on Governing Law & Jurisdictional Choices in Cross-Border Transactions’, Singapore Academy of Law, 11 January 2016, p. 3. Likewise, the latest information from the Hong Kong International Arbitration Centre (HKIAC) reveals that English law was the second most popular choice of contractual law (behind Hong Kong law) in 2016 HKIAC arbitrations (HKIAC has not specified the percentage figures).

‘2015 International Arbitration Survey: Improvements and Innovations in International Arbitration’, p. 13.

‘Brexit Report’, COMBAR, para. 7.

'Speech by the Lord Chief Justice: Opening of the Business and Property Courts for Wales’, para. 7(2).

‘2015 International Arbitration Survey: Improvements and Innovations in International Arbitration’, p. 12.

‘Facts and Figures – 2016: A Robust Caseload’, LCIA, published April 2017.

For example, the Chartered Institute of Arbitrators (CIArb) is based in London. CIArb membership grew by 6.5% in 2016. The London Maritime Arbitrators Association (LMAA), whose procedural rules were revised this year, received over 1,700 new references in 2016. London was the second most frequently selected seat (behind Paris) for ICC arbitrations in 2016. As well as further institutions, London is a principal seat for ad hoc arbitrations, not governed by institutional rules.

‘2015 International Arbitration Survey: Improvements and Innovations in International Arbitration’, p. 14.

‘Should we include these projects in the 13th Programme? Arbitration – could the Arbitration Act 1996 be improved to make arbitrations less costly or lengthy?’ Law Commission, 13th Programme of Law Reform, October 2016.

In August last year, the Singapore International Arbitration Centre (SIAC) was the first major institution to introduce an express summary determination procedure into its rules. The Stockholm Chamber of Commerce (SCC) introduced a different summary procedure in January this year.

‘2015 International Arbitration Survey: Improvements and Innovations in International Arbitration’, p. 7.

Further, as Lord Thomas also discussed, there are new mechanisms for getting important new questions of law into the courts. For instance, the new Market Test Case Scheme provides a procedure to resolve issues in the market for which there exists no authoritative guidance. It aims to resolve market uncertainty before damage is done to the market as a result of that uncertainty.

‘Reforms will threaten London’s place as a world arbitration centre’, Lord Saville, The Times, 28 April 2016.

The statistics, however, are not clear-cut: 77% of respondents to the 2015 QMUL survey did not favour an appeal mechanism on the merits (but there was no specific question about the desirability of appeals on a point of law). However, 17% of respondents cited a lack of appeal mechanism on the merits as amongst the three worst characteristics of international arbitration (although not specifying whether that appeal should be to a national court). Further, for the in-house counsel respondents, the lack of an appeal mechanism on the merits was the third most frequently selected worst characteristic (‘2015 International Arbitration Survey: Improvements and Innovations in International Arbitration’, pp. 7-8).

‘Should we include these projects in the 13th Programme? Arbitration – could the Arbitration Act 1996 be improved to make arbitrations less costly or lengthy?’ Law Commission, 13th Programme of Law Reform, October 2016.

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